Navigation

25th May 2014

Singapore Real Estate

Reviving kampung spirit in
HDB flats

Source: Straits Times

Tampines Central will become a testbed for two new
ideas to encourage public flat residents to connect, bond and revive the
"kampung" spirit. Public walkways that run through housing estates
will be turned into "social linkways", by adding seating or exhibits,
for instance, to encourage people to linger when they meet a neighbour.

If the latest official data is anything to go by,
buyers are no longer as nervous about signing up for a new home, despite
mortgage lending rules that have tamed a once-buoyant market. Last month,
buyers returned to the market with more vigour, purchasing 745 new homes - up
60 per cent from March's figure.

Playgrounds located within buildings, such as the ones in Westgate Mall
and Safra Jurong (right), are apparently designed to be entertaining for young
children. The facilities are well padded to minimise injuries, and staff
control access to prevent overcrowding. However, such playgrounds have a basic
structure that is essentially a vast network of tunnel-like pathways.

Within the ashes left by Spain’s real-estate crash, some embers are glowing.

As the recovery in euro-region’s fourth-largest economy extends and its record unemployment subsides, the property market whose slump locked the country into a recession is showing signs of life. While home-price data isn’t yet signaling a turnaround, an increase in sales indicates values may be starting to stabilize.

The market is now safe enough for Stanislas de Bellescize, a 44-year-old computer programmer who recently took the plunge and bought a house two subway stops from the affluent Salamanca district in downtown Madrid. More such decisions would offer Prime Minister Mariano Rajoy the prospect of a further pillar on which to build Spain’s revamped economy after more than half a decade of misery.

“We thought this is the right moment,” said de Bellescize, who has found new work after losing his previous job last year. “There is still room to negotiate prices.”

First-quarter house prices and mortgage approvals for March are due to be published on May 28. Economists surveyed by Bloomberg News forecast the data will show the smallest decline in values since 2010.

Pent-Up Demand

“A stabilization of prices is on the horizon for 2015,” Jesus Castillo, a Paris-based economist at Natixis, which forecasts declines will slow to an average 2 percent next year from 4 percent this year.

Evidence of green shoots in the market are emerging. Spain’s General Council of Notaries said earlier this month that home sales jumped more than 45 percent in the first quarter from a year earlier.

“Pent-up demand from buyers who’d been holding off is now coming to the market,” said Juan Villen, head of mortgage lending at Idealista.com, Spain’s largest property website. “They realize prices won’t fall much further and the economy won’t get any worse.”

Further releases this week, including April retail sales and first-quarter gross domestic product, may show stronger growth as households loosen spending slashed amid the toughest austerity measures in the nation’s democratic history. The GDP data will probably confirm economic expansion accelerated to 0.4 percent from 0.2 percent at the end of 2013.

Boom Legacy

Spanish bonds advanced today on speculation that the European Central Bank will increase economic stimulus next month. The yield on Spain’s 10-year benchmark bond fell 10 basis points to 2.89 percent in Madrid. That compares with a euro era record of 7.75 percent in July 2012, when the country was forced to seek aid from European Union peers.

As buyers re-emerge in certain parts of the country, prices, which have dropped an average of 47 percent since the peak in 2007, are starting to increase in cities such as Barcelona, the second-largest, according to Idealista.

In southern-eastern Valencia, the epicenter of the decade-long construction boom and subsequently among the regions worst hit by the crisis, the local association Fevec says builders are being asked to complete hundreds of unfinished homes which landed on the books of Spain’s bad bank, known as Sareb.

Valencia accounts for close to a fifth of Spain’s 1 million empty homes. Those vacant properties are a legacy of the unbridled building of almost 700,000 houses a year between 1997 and 2006, more than France, Germany and the U.K. combined. Last year, there were 43,600 homes completed in Spain.

Investors Gather

“It’s not only foreigners anymore, we’re actually getting calls from people in Madrid,” said Jesualdo Ros, general secretary of Provia, the builders association in Murcia, south of Valencia. “It’ll take time but residential tourism will eventually help to revive local real-estate demand as well.”

The improvement is already attracting investors such as Blackstone Group LP (BX), Goldman Sachs Group Inc (GS) and Azora Capital SL, which last year bought apartment blocks and social-housing developments from local authorities in Madrid.

Investment in Spain by funds, private-equity firms and other financial-services companies more than doubled to 13.9 billion euros ($19 billion) last year. About 37 percent of that went into real estate assets, according to debt-restructuring firm Irea, which expects the proportion to increase this year.

Economists including Souheir Asba at Societe Generale SA in London expect mortgage lending to start recovering toward the end of the year as banks -- which forced Spain to seek a 40 billion-euro bailout in 2012 -- finish cleaning up their books.

Pick Up

“It’s quite likely to pick up after the European Central Bank’s asset quality review,” said London-based Asba. “Demand is improving and not yet matched by offer.”

“Banks are no longer offering 120 percent mortgages over 40 years,” he said. “Today you need at least 20 percent of the property’s value saved up before you can attempt to buy it.”

His Madrid-based firm, Acuna & Asociados, estimates that 40 percent of unsold housing units will never find buyers due to their undesirable location and because workers earning 1,000 euros a month -- known as “mil euristas” -- aren’t able to stump up deposits. About 30 percent of workers in Spain earn less than 1,216 euros a month, statistics office data show.

“Real estate is lagging but it’ll follow now that the economy has started to grow,” said Madrid-based Angel Laborda, chief economist at Funcas, Spain’s savings banks’ foundation. “It’s taking much longer, but Spain is going through the same process as the U.S. or Ireland, where construction is contributing to the economy again.”

Berlin voters rejected the government’s plan to build homes, schools and a library on Tempelhofer Feld, the former airfield where Allied bombers once delivered food to a city besieged by the Soviet Army.

The development on the edges of Tempelhof, now a recreational lawn almost the size of New York’s Central Park, was voted down by the majority of voters in the referendum and more than a quarter of all Berliners eligible to vote, Berlin’s Election Commission said on its website today. By 9:38 p.m. about 83 percent of the votes had been counted. A final result is expected by the end of the day.

The referendum was meant to settle a disagreement over a controversial project that pitted government officials trying to address a housing shortage against locals who worried they would lose access to Berlin’s biggest park. Polls putting roughly equal numbers of voters on either side of the ballot had made the outcome difficult to predict.

Tempelhof Airport was built in 1936 by Hermann Goering’s Reich Air Ministry. Used during the Cold War for an Allied Forces’ airlift to save Berlin from starvation, it was closed in 2008 after a referendum to keep it open failed because of a low turnout. Once it was shuttered, local residents staged demonstrations, demanding the airfield be opened to the public, which happened in 2010.

The vote blocks all development at the airfield. The government had planned to build 4,700 homes over several stages, with at least half of the 1,700 homes planned for the first phase subsidized to make them more affordable. All of the development would have been on the edges of the former airfield, leaving the rest of the site as a public space that would still be bigger than Berlin’s Tiergarten, a park on the west side of the Brandenburg Gate.

Hot Housing

Housing is a hot-button issue in a city where disposable income and employment lag behind the national average. Since 2005, the number of people living in Berlin has risen 3 percent to 3.4 million, according to data compiled by the city government, which expects 7 percent more residents by 2030.

Rents have increased by 23 percent in the past three years, according to Bulwiengesa, with some areas showing gains of more than 40 percent.

Chinese stocks trading in the U.S. rose to the highest in two months as real-estate companies including E-House China Holdings Ltd. (EJ)led gains on speculation the government is easing property curbs to spur growth.

China has allowed most cities to adjust home-buying curbs, the Southern Weekly reported May 22, citing several unidentified people from the housing ministry. Speculation that the government will ease the policy mounted as data showed new building construction has fallen 22 percent this year while sales have slumped, creating a drag on the economy. Gross domestic product grew 7.4 percent in the first quarter, the slowest since September 2012.

“There’s seems to be a level of support for the market,” Wayne Lin, a money manager at Baltimore-based Legg Mason Inc., which oversees $673 billion, said by phone on May 23. “They are walking a fine line between introducing more discipline in the market and making sure that the measures won’t slow the economic growth too much.”

Record Close

The iShares China Large-Cap ETF, the largest Chinese exchange-traded fund in the U.S., added 1 percent last week to $36.34, climbing to a six-week high on May 22. The Standard & Poor’s 500 Index climbed to a record, closing above 1,900 for the first time, as Hewlett-Packard Co. rallied and data showed purchases of new homes climbed in April.

The Shanghai Stock Exchange Property Index jumped 2.1 percent on May 23, the most in a month, after the Southern Weekly reported that the Ministry of Housing and Urban-Rural Development has allowed Chinese cities except for Beijing, Shanghai, Guangzhou and Shenzhen to independently adjust curbs. Two phone calls to the news department of the housing ministry went unanswered. Hangzhou, a city near Shanghai will limit home price cuts, the Qianjiang Evening News reported, citing an unidentified person with a developer.

E-House Earnings

American depositary receipts of E-House rose to a one-month high of $10.25. The company reported adjusted net income of 8 cents for the first quarter on May 20, surpassing the 4-cent forecast of two analysts surveyed by Bloomberg. It also raised the upper end of its forecast range for the second-quarter revenue to $930 million, from $900 million estimated in March.

SouFun jumped to $12.28, the highest since May 2.

Youku sank 1.4 percent for the week to $20.31, the lowest since July 2013. The company said in a statement on May 22 that it projects second-quarter sales in a range from 940 million yuan($151 million) to 1 billion yuan. The average estimate of nine analysts surveyed by Bloomberg was 1.01 billion yuan.

Rising competition for online-video viewers in China will slow the company’s growth as it refrains from spending more on content to attract new customers, according to Echo He, an analyst at Maxim Group LLC.

“They are in a dilemma,” He, who has a sell rating on Youku, said in a phone interview. “If they spend money on content, they cannot make profit. If they don’t spend, there won’t be viewers and ads. They are in a tough spot.”